Magee v. Exxon Corp., 97-2322EA

• Decision Date: 06 February 1998
• Docket Number: No. 97-2322EA,97-2322EA
• Citation: 135 F.3d 599
• Parties: John Ashley MAGEE; Aaron Chris Emerson; Mark E. Tucker, Plaintiffs-Appellants, v. EXXON CORPORATION; Defendant-Appellee, Scott Silar; Virginia Silar, doing business as Razorback Exxon; Tommy Mardis, doing business as Exxon Snak; Bradley S. Morris, doing business as Brad's Exxon; Defendants-Appellees, Howard Rose, doing business as Alma Exxon, Defendant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 599

135 F.3d 599

John Ashley MAGEE; Aaron Chris Emerson; Mark E. Tucker Plaintiffs-Appellants, v. EXXON CORPORATION; Defendant-Appellee Scott Silar; Virginia Silar, doing business as Razorback Exxon Tommy Mardis, doing business as Exxon Snak; Bradley S Morris, doing business as Brad's Exxon; Defendants-Appellees, Howard Rose, doing business as Alma Exxon, Defendant.

No. 97-2322EA.

United States Court of Appeals, Eighth Circuit.

Submitted Dec. 8, 1997.

Decided Feb. 6, 1998.

Robert D. Smith, Little Rock, AR, argued (Nick Wilson, on the brief), for Plaintiffs-Appellants.

Troy Anthony Price, Little Rock, AR, argued (Charles L. Schlumberger, John R. Eldridge, III, and Ralph C. Williams, on the brief), for Defendant-Appellee.

Before FAGG, BEAM, and MORRIS SHEPPARD ARNOLD, Circuit Judges.

FAGG, Circuit Judge.

John Ashley Magee, Aaron Chris Emerson, and Mark E. Tucker (the credit buyers) appeal from the district court's order granting summary judgment in favor of Exxon Corporation and several Exxon service stations (the Exxon defendants). The credit buyers brought this lawsuit in Arkansas state court, contending the Exxon defendants had charged them a rate of interest in excess of that permitted by Arkansas law. The Exxon defendants removed the case to federal court, even though the citizenship of the parties lacked complete diversity and on its face the credit buyers' complaint presented no federal-law claim. Because we conclude the district court lacked subject-matter jurisdiction, we vacate the district court's order and remand the case for remand to state court.

In 1982, Exxon launched a discount-for-cash program. Under the program, Exxon retailers charged slightly less for cash purchases of gasoline than for credit purchases. In their complaint, the credit buyers contended this price difference represented hidden interest that exceeded the maximum interest rate allowed under the anti-usury provision of the Arkansas Constitution. See Ark. Const. art. XIX, § 13. The Exxon defendants removed the case to federal court based on the preemptive effect of the Truth in Lending Act (TILA or the Act), 15 U.S.C. §§ 1601-1667e (1994). The Exxon defendants relied on two provisions of the TILA to support their notice of removal. Section 1666f(b) provides that under stated conditions a discount offered for the purpose of inducing cash payment is not a finance charge. Section 1666j(c) states: "Notwithstanding any other provisions of this subchapter, any discount offered under section 1666f(b) of this title shall not be considered a finance charge or other charge for credit under the usury laws of any State...."

The credit buyers never moved to remand this case to state court, nor do they question federal jurisdiction on appeal. A plaintiff has only thirty days after a defendant files a notice of removal to move for remand "on the basis of any defect in removal procedure." 28 U.S.C. § 1447(c) (1994); Caterpillar Inc. v. Lewis, 519 U.S. 61, ----, 117 S.Ct. 467, 473, 136 L.Ed.2d 437 (1996). Lack of federal subject-matter jurisdiction, however, cannot be waived, and we may raise the issue ourselves even if the parties do not. See Berger Levee Dist. v. United States, 128 F.3d 679, 680 (8th Cir.1997); Fed.R.Civ.P. 12(h)(3) ("Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.").

The Supreme Court has concisely summarized the fundamental principles governing the removal jurisdiction of the federal courts:

Only state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant. Absent diversity of citizenship, federal-question jurisdiction is required. The presence or absence of federal-question jurisdiction is governed by the "well-pleaded complaint rule," which provides that federal jurisdiction exists only when a federal question is presented on the face of the plaintiff's properly pleaded complaint.

Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429, 96 L.Ed.2d 318 (1987). Federal-question jurisdiction is not created by a federal defense, including the defense of preemption, even if the defense is the only contested issue in the case. See Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 14, 103 S.Ct. 2841, 2848-49, 77 L.Ed.2d 420 (1983).

That said, the Supreme Court has recognized a corollary to the well-pleaded complaint rule known as the complete preemption doctrine. See Williams, 482 U.S. at 393, 107 S.Ct. at 2430. Under this doctrine, "[o]nce an area of state law has been completely pre-empted, any claim purportedly based on that pre-empted state law is considered, from its inception, a federal claim, and therefore arises under federal law." Id.; see also Hurt v. Dow Chemical Co., 963 F.2d 1142, 1144 (8th Cir.1992) ("It is not just that a preemption defense is present: the [pleaded state-law] claim is completely federal from the beginning."). The complete preemption doctrine applies only when a federal statute possesses " 'extraordinary pre-emptive power,' a conclusion courts reach reluctantly." Gaming Corp. of America v. Dorsey & Whitney, 88 F.3d 536, 543 (8th Cir.1996) (quoting Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 65, 107 S.Ct. 1542, 1547, 95 L.Ed.2d 55 (1987)). Congressional intent is the touchstone of the complete preemption analysis. See id. at 544. We...